Shared Flashcard Set

Details

MS Contracts AMP
MS Contracts AMP
31
Law
Post-Graduate
07/15/2012

Additional Law Flashcards

 


 

Cards

Term
Material Benefit Rule
Definition
Under the material benefit rule, some courts will enforce a promise if it is based on a material benefit that was previously conferred by the promisee on the promisor and if the promisee did not intend to confer the benefit as a gift. This includes situations in which the promisee performed an act at the promisor’s request or performed an unrequested act during an emergency.
Term
preexisting duty rule
Definition
The preexisting duty rule provides that a promise to perform, or the performance of, an existing legal duty is not consideration
Term
moral consideration
Definition
Past or moral consideration will not satisfy the bargain requirement because the consideration was not given in exchange for the promise when made.
Term
token consideration
Definition
If the consideration is only token (i.e., something entirely devoid of value), it will usually not be legally sufficient.
Term
two elements are necessary to constitute "consideration"
Definition

Basically, two elements are necessary to constitute consideration: (i) there must be a bargained-for exchange between the parties; and (ii) that which is bargained for must be considered of legal value or, as it is traditionally stated, it must constitute a benefit to the promisor or a detriment to the promisee.

 

The benefit to the promisor need not have economic value; for example, peace of mind may be sufficient for consideration.

Term
Promissory estoppel
Definition

Promissory estoppel is considered a substitute for consideration. Thus, consideration is not necessary if the facts indicate that the promisor should be estopped from not performing.


a promise is enforceable if necessary to prevent injustice if: (i) the promisor should reasonably expect to induce action or forbearance; (ii) of a definite and substantial character; (iii) and such action or forbearance is in fact induced

Term
warranty of title
Definition

Unless properly disclaimed, this warranty is included in every contract for the sale of goods.


A warranty of title is included in every contract for the sale of goods. Any seller of goods warrants that the title transferred is good, that the transfer is rightful, and that there are no liens or encumbrances against the title of which the buyer is unaware at the time of contracting.


Term
warranty against infringement
Definition
The warranty against infringement, which warrants that goods are delivered free of any patent, trademark, copyright, or similar claims, arises automatically only in contracts by merchant sellers.
Term
implied warranty of merchantability
Definition
The implied warranty of merchantability, which generally warrants that the goods are fit for the ordinary purpose for which such goods are used, also is implied only in contracts by merchant sellers.
Term
implied warranty of fitness for a particular purpose
Definition
The implied warranty of fitness for a particular purpose arises only when: the seller has reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the seller’s skill and judgment to select suitable goods, and the buyer in fact so relies
Term
condition precedent vs. condition subsequent
Definition

A condition precedent means that a contract will not become effective until the condition has occurred.


Under a condition subsequent, a party is not obliged to perform until the happening of a certain event. This type of condition limits or modifies a duty under an existing or formed contract. A contingency clause might be included in such an existing contract.

Term

Parole Evidence Rule: 

 

completely integrated writing

vs.

partially integrated writing

Definition
A completely integrated writing may not be contradicted or supplemented. A partially integrated writing cannot be contradicted, but may be supplemented by proving up consistent additional terms.
Term

shipment contract

 

vs.

 

destination contract

Definition

In a shipment contract, the risk of loss passes to the buyer when the goods are delivered to the carrier. Any loss incurred en route is borne by the buyer.


The risk of loss does not pass to the buyer until thegoods are tendered to the buyer under a destination contract.

Term

Corbin test

 

vs.

 

Williston test

Definition

The Corbin test takes into account the specific circumstances of the transaction involved and asks whether parties like these situated as they are would naturally and normally include in their writing the extrinsic matter that is sought to be introduced.

 

Courts applying the Williston testlook only at the face of the written agreement and decide whether contracting parties (in general) would include the term sought to be proved.

 

Both tests consider expressions made both prior to the writing and contemporaneous withthe writing.

Term
naturally omitted terms doctrine
Definition
Common Law's naturally omitted terms doctrine allows evidence of terms that would naturally be omitted from a written agreement. A term would naturally be omitted if it does not conflict with the written integration and concerns a subject that similarly situated parties would not ordinarily be expected to include in the written instrument. If a term is found to be naturally omitted, the writing is considered to be only partially integrated despite an appearance of complete integration.
Term
part performance
Definition

Under the doctrine of part performance, conduct that unequivocally indicates that the parties have contracted for the sale of the land will take the contract out of the Statute of Frauds.


Requires at least two of the following: payment (in whole or in part), possession, and/or valuable improvements.

Term
express warranty
Definition

 

Any affirmation of fact or promise made by the seller, any description of the goods, and any sample or model creates an express warranty if it is part of the basis of the bargain.

A statement purporting to be only the seller’s opinionor commendation of the goods is not a statement of fact and does not create an express warranty.

Term
Statute of Frauds
Definition

 

To satisfy the Statute of Frauds, there must be one or more writings signed by the person sought to be held liable on the contract that reflect the material terms of the contract.

 

The Statute of Frauds does not require a formalwritten contract signed by both of the parties. For example, a letter, receipt, or a check containing the material terms (e.g., quantity for sale of goods) and signed by the party to be charged satisfies the Statute of Frauds.

 

The needed signature need not be handwritten, but the document or documents must include the material terms of the contract, not just acknowledge the existence of the contract.

 

Generally, the Statute of Frauds requires that suretyship promises be in writing and signed by the party to be held liable. However, there is an exception for suretyship promises that primarily serve the pecuniary interest of the promisor; they are not within the Statute of Frauds.

Term
impossibility
Definition
Builder’s duties under the contract will be discharged by impossibility. If a contract’s subject matter is destroyed without the fault of either party, contractual duties are discharged. If the mansion no longer exists, it is impossible to renovate it.
Term
discharged by impracticability
Definition
Performance is impracticable when it is still possible but can be accomplished only with extreme and unreasonable difficulty or expense. (not death of a party)
Term

Right of Inspection

(Article 2)

Definition

 

Unless the contract provides otherwise, the buyer has a right to inspect the goods at the buyer's own expensebefore she pays.

 


Under Article 2, expenses of inspection must be borne by the buyer but may be recovered from the seller if the goods do not conform and are rejected.

Term
novation
Definition
A discharge by novation occurs when a new contract substitutes a new party to receive benefits and assume duties that had originally belonged to one of the original parties under the terms of the old contract.
Term
discharge by release
Definition
A discharge by release is an agreement by the contracting parties not to sue on the contract.
Term
frustration of purpose
Definition
For duties to be discharged by frustration of purpose, the purpose of the contract must have become valueless by virtue of a supervening event. Frustration is generally raised by the party whose duty is to pay money. This would be the appropriate defense for Owner because a contract to renovate his mansion that no longer exists is valueless to him. It is not valueless to Builder. Builder’s appropriate avenue to discharge is impossibility, not frustration.
Term
rescission
Definition

An agreement to rescind is itself a binding contract supported by consideration” is a true statement. The consideration is the giving up by each party of her right to counterperformance from the other.

 

A third-party beneficiary contract may not be discharged by mutual rescission if the third-party beneficiary’s rights have vested, regardless of whether he is a creditor or donee beneficiary.

 

Once an offeree of a unilateral contract has fully performed, the contract can be rescinded, but only if the rescission promise is supported by :

1. An offer of new consideration by the nonperforming party;

2. Elements of promissory estoppel; or

3. Manifestation of an intent by the offeree to make a gift of the obligation owed to her.

 

A mutual rescission agreement may be oral, even if the contract to be rescinded expressly states that it can be rescinded only by a writing.

Term
requirements to withdraw repudiation.
Definition
A repudiating party may at any time before his next performance is due withdraw his repudiation unless the other party has canceled, materially changed her position in reliance on the repudiation, or otherwise indicated that she considers the repudiation final.
Term
Rules for Article 2 non-carrier case
Definition

the place of delivery is the seller’s, NOT the buyer’s, place ofbusiness.

The tender must be at a reasonable hour. The seller must give the buyernotice reasonably necessary to enable her to take possession of the goods, and the seller must put and hold conforming goods at the buyer’s disposition for a time sufficient for the buyer to take possession.

Term
accord
Definition
In general, an accord (or a modification not involving a sale of goods) must be supported by consideration.
Term
RESTITUTION
Definition
RESTITUTION (QUASI-CONTRACT): Protects against unjust enrichment whenever contract law yields
an unfair result. Restitution is the remedy of last resort.
Term
ADVERTISEMENTS:
Definition
only an offer if specifies a QUANTITY (solves the typical problem of no quantity)
Term
OPEN PRICE TERM
Definition
OPEN PRICE TERM: Court will read in a “reasonable” price except in a contract for the sale of real
property.
Supporting users have an ad free experience!